You might have noticed that airline tickets have become more expensive.
Jet airways has been struggling for a while as they have run out of money. They have had to cut the pay of their pilots, and cancel their flights. They have just cancelled all international flights as well.
What happened? They have a huge network in India, but have a very expensive fleet of planes. They have been facing fierce competition for passengers from low cost airlines. These dynamics, coupled with rising fuel prices meant that Jet suddenly didn’t have enough money to repay all the loans it had taken. Their partner, Etihad, who owned a 24% stake in them, lost confidence in Naresh Goyal, the founder of Jet, and wanted to sell its stake to the banks.
Watch the news these days to see what happens next!